Use the Following to Answer Questions

question 79

Multiple Choice

Use the following to answer questions :
Figure 4-2
-Refer to Figure 4-2.What is the elasticity of the demand curve DD between points C and D?

• A)3.33
• B)1.8
• C)1.0
• D)0.56
• E)None of the above

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Definitions:

Perfect Competitors

Firms that are so numerous and small in relation to the market they serve that they have no power to alter the market price of their product, characterized by a lack of market dominance.

Economic Profit

Profit exceeding the opportunity cost of resources used, indicating a return greater than the most lucrative alternative.

ATC Curve

Refers to the Average Total Cost curve, which represents the average cost per unit of output, calculated by dividing total cost by the quantity of output produced.

Excess Capacity

A situation where a firm is producing at a lower scale of output than it has been designed for.